Stimulating Future Customers

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Michigan solution provider Tech Experts is launching its own economic stimulus program by offering free hosted e-mail to small businesses struggling to survive. While there are no catches or obligations, the program may just cultivate new, loyal customers for when the economy recovers.

Federal Reserve Chairman Ben Bernanke has declared the recession over, and
with good reason. Banks and financial services firms are on the mend. Housing
starts and existing home sales are climbing. The markets seem stable. And many
of the Fortune 500 set are once again declaring profits.

After a year of the worst recession this country has seen in three decades,
it appears the economic storm clouds are starting to break. There’s just one
pesky indicator that continues to point in the wrong direction: unemployment.
And nowhere is the job loss felt more profoundly than in Michigan,
which has suffered from the long, slow and painful collapse of the automobile
industry. The one-time heavy manufacturing capital of the world has the highest
unemployment rate in the country—15.6 percent—and it’s still climbing.

Witness to Michigan’s economic
woes is Thomas Fox, president of solution and services provider Tech Experts. Located in Monroe,
Mich., the midpoint between the
manufacturing centers of Detroit
and Toledo, Ohio,
Tech Experts has watched its customers suffer catastrophic losses as the heavy
iron companies slash jobs and, consequently, IT spending. While the recession
is forcing many displaced workers to become entrepreneurs, finding money to
invest in basic IT services such as e-mail and Websites is difficult to find.

Fox, known in the channel for his marketing savvy, is taking a page out of
the Obama administration’s economic recovery playbook and launching his own
stimulus program to help would-be customers. For the next year, Tech Experts is
giving small businesses with 10 or fewer employees free hosted SMTP POP3
e-mail and, if desired, a sharply discounted basic Website.

"The national economy may be turning around, but the micro-economy in southeast
Michigan has never been worse.
Unemployment is above 15 percent, and I have a lot of customers that are
hurting," Fox says.

Fox came up with what he’s calling Tech Experts’ "Email Stimulus Program" about four
months ago as he watched longtime customers cut back on their IT spending as
the local economy spiraled out of control. He witnessed firsthand the
interconnectedness of manufacturers, their suppliers and the companies that
subsist on their economic activity. When Ford shut down a local car factory,
not only were the parts suppliers affected, but so also were all the local
restaurants, retail stores and services companies. A local gym that Tech
Experts supports lost nearly half of their members when Ford pulled the plug.

By providing free e-mail to new and former customers, Fox hopes to give
small businesses a small, albeit, important break as they struggle to find
their footing while the economy recovers. He hardly thinks the initiative will
have the same impact as "Cash for Clunkers" did for carmakers, but it may be
enough to help a displaced autoworker get his construction company or repair
shop off the ground.

Providing basic POP3 e-mail isn’t the
most expensive service, but the expense of scaling it across dozens of would-be
small business customers could add up quickly. Fox is able to extend himself
through the stimulus program because of the infrastructure he’s already built
for his managed and hosted services. Every managed service requires a certain
level of unutilized capacity to buffer against capacity demands. Fox is simply
exercising the well-worn managed services principle of the more you serve, the
lower your costs become and the higher your profitability will rise. The
stimulus program, he believes, will have a minimum impact on his expenses and
only slightly dampen profitability.

Fox makes numerous assurances that the service offer is absolutely legit
with no hidden fees or catches. But there’s a business development angle to his
program. Once the lid is off his initiative, he expects many of the local media
outlets to write articles that will get small businesses interested in signing
up. Once they’re in the program, he will build a list of prospective customers
to convert to higher level services when the free 12-month plan is over. "It
gets our feet in the door with folks that aren’t familiar with us," Fox says.

Several IT vendors and manufacturers are offering special rebates, discounts
and financing labeled as "stimulus programs." But many of those programs are
simply designed to get existing customers to trade in old equipment or buy new
machines. Few of them are actually aimed at building expanded and sustained
potential customer pools. Fox’s program has the benefit of being both
altruistic and, potentially, profitable, since it's cultivating a new set of
potential customers that have experience with Tech Experts’ services and
delivery capacity. What Fox is betting is that when these businesses get
healthy they’ll turn to Tech Experts first instead of shopping around for their
IT product and services needs.

"The key to all of this is to keep top-of-mind awareness when their need
comes around next time," Fox says.

In the end, the Tech Experts Email Stimulus Program could have two waves of
benefit: helping small businesses during these tough times and propelling Tech
Experts forward when the economy is recovered. That’s a stimulus plan that
keeps on giving.

Lawrence M. Walsh is vice president
and group publisher of Channel Insider. Click here to read his blog, Secure Channel,
for the latest insights on security technology and policy trends affecting
solution providers.

Lawrence Walsh is editor of Baseline magazine, overseeing print and online editorial content and the strategic direction of the publication. He is also a regular columnist for Ziff Davis Enterprise's Channel Insider. Mr. Walsh is well versed in IT technology and issues, and he is an expert in IT security technologies and policies, managed services, business intelligence software and IT reseller channels. An award-winning journalist, Mr. Walsh has served as editor of CMP Technology's VARBusiness and GovernmentVAR magazines, and TechTarget's Information Security magazine. He has written hundreds of articles, analyses and commentaries on the development of reseller businesses, the IT marketplace and managed services, as well as information security policy, strategy and technology. Prior to his magazine career, Mr. Walsh was a newspaper editor and reporter, having held editorial positions at the Boston Globe, MetroWest Daily News, Brockton Enterprise and Community Newspaper Company.

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